Q: I just received a copy of my 3-in-1 credit report. I really don’t understand it. Is there some place where someone can sit down with me and walk me through my credit report? I want to clean up my credit, but I don’t know where to start.

A: Credit reports can be confusing. You can sit down with a credit counselor with a non-profit credit counseling agency who can guide you through your specific credit report. A good place to find a reputable non-profit credit counseling service is through the National Foundation for Credit Counseling (NFCC.org) or through Consumer Credit Counseling Service (CCCS.org). They provide budget counseling that should be free, or very nearly free.

But here are some specific things to look at on your credit history along with some steps you can take to improve credit score:

First, check the report for errors. Is your name, address and other contact information correct? Does the credit history correctly list how long you’ve lived at your address? Look at the list of the credit card accounts. Are any missing? Are any listed that you had previously closed (in writing)? Are any credit cards listed that are not yours?

Your credit history should list any outstanding loans that are attached to your social security number. Are any loans (car, school, mortgage, home equity line of credit, home equity loan, or other personal loans) listed that are incorrect? Do the amounts listed seem about right?

What about credit card debt? If you carry any debt, check to be sure the correct amount is listed next to the credit card account.

If there are any errors, you should immediately inform all three credit bureaus in writing. You may be able to do this through their web sites, (Experian.com, Equifax.com, and Transunion.com), or at least find contact information and instructions on how to correct errors.

If there are no errors, then you should take a look at information that would be reported as negative, including late payments, charge-offs, repossessions, foreclosures, and bankruptcies. Each of these will have a severe negative impact on your credit score, which is a number by which companies rate your credit. (Credit scores run from about 400 to 900. Anything over 680 is considered “good” credit.)

Other things that might drag down your credit score include being a part of a debt management program or even having a home equity line of credit, which if you pay for things with the line of credit it could be viewed as installment debt on your credit history.

If you want to clean up your credit and raise your credit score, you need to do only a few simple things: First, clear up any errors or mistakes. Next, start paying all of your bills on-time. Make arrangements to pay off any charge-offs. Pay off your debt. If you have really lousy credit, it could take you up to 2 years of on-time payments to raise your credit score, but the time you invest will be worth it. Why? When you raise your credit score, you become eligible for the best loans with the lowest interest rate and fees. It’s a nice trade-off.

Q: My husband and I have purchased a home and only lived in it for 5 months. In a very short time, the housing costs in our area have skyrocketed. Our house is now worth around $100,000 more than what we paid for it.

If we were to sell it and re-invest all of what we make into a more expensive home, do we still get hit with capital gains?

A: Yes. Unless you’ve lived in your home for two of the past five years, you will have to pay 15 percent capital gains tax on the profits. In your case, that would amount to $15,000.

The question is, why move now? Why not wait another year and a half until you can keep all of the profit tax-free? Do you believe that this is a temporary spike in prices and that prices will ultimately fall?

If that’s your take, then you should sell and move into something that has more potential to increase in profits down the line or use your windfall and move into an area with a better school district.

Paying a little tax is better than missing all of the profit.

Oct. 23, 2004.